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2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
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Tex Pro Offline
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Post: #76
RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
Get Ready for the Perma-Slump:

http://www.foreignpolicy.com/articles/20...us_economy

Quote:Why are the world's great economies having such trouble growing? It's the question on every macroeconomist's lips these days, especially after government officials started downgrading expectations in the United States. A look back at economic history suggests the answer was staring us in the face all along.

For many economists, the central issue today is whether slow growth -- like the particularly terrible quarter earlier this year -- represents a long hangover from the Great Recession or a structural shift. I think it's too early to draw this distinction; only five years have passed since the worst of the recent crisis, which was the deepest in decades. But I also think that structural shifts tend to be the result of long-term trends rather than stuff that happens in a recession which, by some accounts, has actually been cathartic. And when I look at long-term trends, I see a simple explanation for slower growth.

Let's start with the basics. We can split all economic growth into just two factors: expansion of the labor force and increases in workers' output. In other words, the only ways to grow are to get more workers or make each worker more productive. The former is accomplished through fertility, longer life spans, and immigration. The latter depends on workers' access to capital -- human or physical -- and technology.

I'll consider the latter first. The quickest way to give workers access to capital is to move them into cities and suburbs. Not many companies build big factories in the countryside. They want to be near energy grids, transport links, and all the things that their workers will need. That's why businesses invest more in urban areas, where it's easier to reach people with public services, too -- hence more access to machines and computers, and also to education and training.

The quickest way to give workers access to technology is to copy it. This is what Japan, Korea, and China have done in sequence over the past half-century. They didn't invent personal computers, mobiles phones, or the internal combustion engine; they just copied them and exported them more cheaply than other countries could. Only a handful of economies are at the world's technological frontier, pushing constantly for new ideas. The rest grow faster by borrowing technology developed by others, duplicating products, and exporting them at lower prices.

These two economic engines -- urbanization and technology adoption -- can generate a lot of growth. (Just ask China.) But eventually, they run out of steam. You can only urbanize so much, and at some point you've stolen all the technology there is to steal. Moreover, wages usually rise as countries grow, so your export advantage will gradually disappear. (Again, just ask China.) Then your country will have to compete on a level playing field with the most advanced economies in the world, and for that you'll need innovation.

Innovation is tough to come by, though. You can't just make it happen. Rather, you need to create the right environment for the entrepreneurial spirit, an exchange of ideas, and speculative investment to flourish. Even in the most innovation-friendly countries, growth driven by the low-hanging fruit of urbanization and technology adoption tends to be faster than growth born of new science and breakthrough products.

By the time a country is relying on innovation to improve productivity, population growth has often dried up as well. Around the world, countries with higher living standards tend to have lower fertility rates, as parents prefer to invest more in a smaller number of children. Some countries -- like the United States -- also crack down on immigration, as citizens try (mistakenly) to keep all their gains for themselves. Regardless of the reason, there does seem to be an association between higher incomes and lower population growth, at least outside of Qatar.

The upshot of all these notions is that countries generally grow rapidly when they first connect to the global economy, but, as they get richer, they slow down gradually until they reach a stable level of innovation-driven growth. And indeed, this is what seems to be happening in several major economies. Except for spurts driven by one-time occurrences, most of the wealthiest countries haven't seen growth on the order of China or even Korea for decades.

To see why, it helps to consider not just how fast countries grow but what their potential to grow might be. In most cases, a shrinking economy is not fulfilling the potential offered by its supplies of labor, capital, and technology. So in the graphs below, years of negative growth are dropped. I've fitted two trends to the data -- one linear, and one logarithmic -- to offer a couple of hints about where these economies are going and where they have been.

First, consider Japan's path from after postwar reconstruction through the present.

And now, look at Korea, which grew in much the same way Japan did after its currency devaluation and the rationalization of its trade policies in 1964.

And before either of these countries experienced their growth spurts, the United States was already settling into its own postwar path.

Viewed this way, what's happening in the United States today -- slower growth than the postwar average -- looks like the continuation of trends that have been around for decades. The good news is that the trend seems to be flattening out at a level of per capita growth of roughly 1.5 percent. For Japan, the landing point is likely to be a little lower. Korea looks like it has several years of relatively fast growth left before finding out where the floor is.

That said, these levels of growth aren't necessarily destiny. Countries may be able to increase the pace of innovation by enhancing education, encouraging financial development, supporting entrepreneurship, strengthening their legal systems, and opening their markets. Investments in basic research can also pay big dividends. And of course, unexpected shocks, from discoveries of raw materials to natural disasters, can perturb the trends as well, at least temporarily.

But once the big engines of growth run out of gas -- and they always do -- innovation is all that's left. None of this is surprising, given the basics of economic theory. Why are we only waking up to it now?
(This post was last modified: 06-27-2014 11:38 PM by Tex Pro.)
06-27-2014 11:28 PM
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Post: #77
RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
Traditional economics' obsession with growth at any cost is both destructive and insane. It's like if a father was disappointed that his 20 year old son hadn't grown in three years, so he stretched him out on a medieval torture rack in an effort to squeeze out another inch or two of height.

Modern economists view the economy itself as the end, rather than as the means of delivering goods and services to human beings. They literally have their view of reality completely backwards - human beings are viewed as means serving the economy, and the growth of the economy (which is simply an abstraction derived from a host of manipulated calculations) is the primary end goal.

"For I reckon that the sufferings of this present time are not worthy to be compared with the glory which shall be revealed in us.” - Romans 8:18
06-28-2014 10:58 AM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
Leaving Texas off this list is ridiculous. Energy is the key driver of the economy right now and has been for the last few years.
06-28-2014 11:37 AM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-25-2014 04:56 PM)EddieValiant Wrote:  Zerohedge is in the business of doom and gloom.

ZH is one of the website that I follow to be kept up to date about the gloom and doom.
06-28-2014 11:43 AM
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The Father Offline
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-28-2014 10:58 AM)scorpion Wrote:  Traditional economics' obsession with growth at any cost is both destructive and insane. It's like if a father was disappointed that his 20 year old son hadn't grown in three years, so he stretched him out on a medieval torture rack in an effort to squeeze out another inch or two of height.

Wait - would that work on my penis?Undecided
06-28-2014 12:28 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
Speaking for the older guys on this page, I would caution the younger folks not to put too much stake in either "doom and gloom" or the opposite, which has been aptly named irrational exuberance.

I recall, in both the late 1970's and in 1990, the U.S. was mired in what at the time were considered severe recessions, though they were mild compared to what we experienced in 2008. In 1990, the consensus was that "America is over" and Japan would dominate for a century. Oh, those clever and industrious Japanese! They save so much! They work so hard! They will never decline! Except, of course, they did. And for the last 24 years, they have been mired in one slump after another. The U.S., meanwhile, rebounded despite it's obvious challenges for one primary reason: Innovation. And I would argue that innovation has just started. You think airplanes and automobiles and computers and smartphones, the innovations of the last 100 years, improved peoples standard of living? Wait until 50-75 yrs from now when we are reprogramming our DNA to eliminate cancer or regrow a damaged organ. I think, on a global basis, man's standard of living will increase dramatically in the next 100 yrs.

That's not to say it will happen all at once or in a straight line. Twice in the last 15 yrs foolish investors bought into a silly phrase that caused them to purchase assets at ridiculous prices: The tech bubble of the late 1990's and the housing bubble of the early to mid 2000's. And the phrase that foolish, greedy people glommed onto like a hungry baby glomming onto his mothers tit was this: "IT'S JUST GONNA KEEP GOIN' UP AND UP...FOREVER!!" Sorry, bunky, nothing goes straight up - or straight down - forever. Things go in cycles. The wise among us learn to read the signs as to what phase of the cycle we are in, and adjust accordingly.
(This post was last modified: 06-28-2014 12:39 PM by The Father.)
06-28-2014 12:37 PM
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El Chinito loco Offline
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-28-2014 12:37 PM)The Father Wrote:  Speaking for the older guys on this page, I would caution the younger folks not to put too much stake in either "doom and gloom" or the opposite, which has been aptly named irrational exuberance.

You don't have to be a doom and gloomer to see an upcoming decline though. There's real evidence that the U.S. is headed towards an economic precipice in the not so distant future. This isn't coming from right wing gold bug sites or survivalist blogs but real hard evidence out there that things are going to get worse. Personally, I don't believe we're going to see things get real bad in our lifetimes. The U.S. economy and infrastructure is still way too large to fall apart in a generation. I give it a century before there is a dramatic decline happening in standard of living and economy. We will go through normal boom and bust economic cycles in the mean time but the overall decline will still trend negative.

Here are the major factors to consider:

1) The U.S. demographics are shifting rapidly towards an uneducated underclass which is less socially mobile than immigrants of the past. These immigrants also have _more_ kids on average and also do not have the same rate of assimilation. They also have easy access through porous borders and a weak political system. It's an underclass which regenerates instead of assimilates.

2) The majority of U.S. wages for the lower and middle class have been trending flat for 30+ years now. THIRTY years of stagnant wages that have not kept up with inflation. Average inflation is historically around 2-3% a year and it compounds. In the 70's this led to the birth of the women's movement in the workplace because households couldn't survive on a single income anymore. Now the average U.S. household uses personal debt and home equity to finance their lifestyles.. That's why a lot of the u.s. middle class will never be able to retire.

3) Debt. The debt ratio is scary. The government funnels billions into nonsense projects, nonsense social reforms, nonsense wars, and into the hands of lobbyists who work for the wealthiest .01%. What the government should be focusing on is practical education to keep the competitive edge in STEM fields, infrastructure, etc.. which is all being neglected or diminished.

4) Decreasing competitive advantage. The U.S. has the edge on technology and many other fields at the moment. However, a lot of the actual profit and benefits actually flow directly upward. Apple is a pretty good example, the overall design of apple products occur in the U.S. but a lot of the technology (chips, etc..) was sourced from other countries and so is the assembly. That means when it comes to apple products the overall patent holders (founders and other high stakes shareholders) and individual component innovators (foreign companies like Samsung) are the primary beneficiaries but most of that wealth is just locked up into high return accounts. So, you get a very small % of people at the top who benefit the most with ridiculous wealth but the rate of job creation doesn't really increase in the U.S. In fact a lot of the work is already planned to be sourced overseas during the design process.

5) School loan/retirement crisis. I put this in the same category because in both you see financial institutions raping the average U.S. consumer at both ends of their natural life. School tuition has easily doubled and tripled in just the last 10 years, with student loans being big business. Financial institutions have used all sorts of creative math and justifications to try and conceal this. No one has provided any good explanation as to why college tuition at most schools need a 200-300% increase which outstrips even the compounding effects of inflation.

Most people on the cusp of retirement age were/are being raped through their 401ks with portfolios stuffed full of trash funds with super high expense ratios. The reason why is that most financial institutions and brokers aren't held to any kind of real standards of regulation or fiduciary duty. They can lobby, use kickbacks, and do whatever to sell dangerous junk and disguise it as "investments."

6) The banks and other "too big to fail" corporations. I'll say this..derivatives are only one method to engage in basically theft. There's more than one way to skin a cat. When you have several dozen corrupt institutions out there with extremely bright minds planning various hard to understand schemes to rape the U.S. public then it will happen again. The government can't stop it because mass deregulation of the financial markets already took place. There's little oversight, the SEC is a joke. The damage is irreversible. When "bad" things occur the government response is to bail out these companies with taxpayer money after these institutions just got through screwing taxpayers. The people at the very top get immensely wealthy from these schemes. It's privatizing profit and publicizing risk.
(This post was last modified: 06-28-2014 09:09 PM by El Chinito loco.)
06-28-2014 08:58 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-28-2014 10:58 AM)scorpion Wrote:  Traditional economics' obsession with growth at any cost is both destructive and insane. It's like if a father was disappointed that his 20 year old son hadn't grown in three years, so he stretched him out on a medieval torture rack in an effort to squeeze out another inch or two of height.

Modern economists view the economy itself as the end, rather than as the means of delivering goods and services to human beings. They literally have their view of reality completely backwards - human beings are viewed as means serving the economy, and the growth of the economy (which is simply an abstraction derived from a host of manipulated calculations) is the primary end goal.

Spot on. Except if the torture rack fails there's one last trick: changing the measurement definitions. Whereas a foot used to equal 12 inches, redefine as 10 inches. Remeasure. Boom, instant growth. This is essentially what economists have done over the last 50 years, with the tool of redefinition being inflation. Print money, expand debt, prices keep rising, paper wealth rises, boom growth.

As for the cyclical nature of things mentioned by The Father above:

There is a distinction between absolute and relative progress that goes a long way to helping people reconcile some of the contradictory pieces of evidence thrown at us. On one hand, as The Father has said, the progress that has been made in the last 100 years has been remarkable. I'd much rather live in a 2014 world than a 1914 world. The issue I have with the 2014 world is that the 'underlying foundation' as it were is less conducive to making sure that the fruits of progress are easily spread to the masses.

The reasons for this are extensive, but to simplify, taxes, regulations, constant inflation and the need for constant debt. This ensures that in order to get ahead you already have to be ahead in some manner. It's next to impossible to start from scratch and build an empire because you'll run into some sort of ceiling soon enough. The most common ceiling is student loans, which for most people act as an albatross that retards the ability to buy a house, have children or even marry (given that marriage also means inheriting a portion of your spouses' debt). Things like business suffers too, because once you get big enough, you'll have to deal with the costs of complying with regulation, taxes, possible law suits etc, which will also be a drag on your ability to ascend in the respective field. None of these impediments existed in 1914. In today's world the only place that sort of economic freedom still exists in abundance is the internet. The internet is the closest thing to the business environment of 100+ years ago. All you needed was an idea and the willingness to see it out no matter what. That's why so many immigrants came to America in the first place. Today, you need to be rich already, or a huge corporation. In that event, the costs of compliance and costs of college for your kid are negligible, and you are in a much better position to thrive.

That is a superficial analysis, but it represents a relative decline for me, within the absolute progress we have made. It's worth noting that the 1914 world was at the cutting edge of progress in its own right, just like today is. The difference is that, in my view, the system was a better one then. The pushback I usually get from people is arguments to the effect of 'How could a system that allowed for child labor/extremely dangerous working conditions/racism/slavery/etc. be better than what we have today?' That line of thinking misses the distinction between absolute and relative progress. Children not working, and the shift from dangerous mines to air conditioned cubicle farms is the product of absolute progress. Way back when, most people had two options: 1. Have their 10 year old working on the farm, with his father risking his life shift after shift mining, or 2. Starve. That was the harsh reality of life before sprawling metropolises and modern amenities. Those sprawling metropolises and amenities did come in time, owing to an economic system that incentivized production and rewarded people with the fruits of their labor.

That same system, having transported us from point A to point B has been eroded over the last 100 years or so, particularly the last 50. The 'doom and gloomers' recognize this, and worry about it because relative decline doesn't happen in a vacuum. To this point, absolute progress has still been made, and it overwhelms the bad such that we can comfortably paper over the cracks. But at the rate we're going the continuation of that decline will mean that at some point the absolute progress will stop too. Put another way, if there's a biblical flood, it's all well and good to keep 'innovating,' by finding new ways to keep your head above the water as it keeps rising. But what happens when you're standing on top of Everest and you find yourself ankle, and then waist deep? At some point you have to recognize that the flood is the real problem.
06-28-2014 11:16 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
Quote:Speaking for the older guys on this page, I would caution the younger folks not to put too much stake in either "doom and gloom" or the opposite, which has been aptly named irrational exuberance.

I dunno. I think you're just wrong. You lived in a time when the US was rich, and you still think this is the same thing.

Except us young guys got to see the effects of the recession firsthand, while the older guys are riding on the initial good start they had back when the US was much richer. I've seen dozens of my friends and acquaintances get fucked out of careers or jobs in the last 6 years, and I live in a great part of America. I can only imagine how grinding things are in the flyover parts.

You guys think things are going to return to normal, but I think this is the new normal. Thus the shift and focus is on long-term trends to avoid getting caught up in events beyond your control that may suddenly come and turn your life upside down. Hence the emphasis on being location-independent, or even USA independent. Self-sufficiency is the American way so it makes sense to step out of the path of the runaway train.

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06-28-2014 11:44 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
Quote:Spot on. Except if the torture rack fails there's one last trick: changing the measurement definitions. Whereas a foot used to equal 12 inches, redefine as 10 inches. Remeasure. Boom, instant growth. This is essentially what economists have done over the last 50 years, with the tool of redefinition being inflation. Print money, expand debt, prices keep rising, paper wealth rises, boom growth.


This is the crux of the problem. Debt is evil.

Quote:Personally, I don't believe we're going to see things get real bad in our lifetimes.

No one knows the answer to this question. Do you think most homeless men thought they'd end up that way? Or men who get divorced?

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06-28-2014 11:47 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-28-2014 11:47 PM)Samseau Wrote:  
Quote:Personally, I don't believe we're going to see things get real bad in our lifetimes.

No one knows the answer to this question. Do you think most homeless men thought they'd end up that way? Or men who get divorced?

That's the problem with macroeconomics it can all be summed up as probability and likelihood based on available information. It's unlikely to happen soon unless there's some major exogenous change on the horizon that will plunge the U.S. economy into major depression (think 2008 except worse) which might finally do it. A serious war with Russia or China might do it too.

Then again this is the sort of stupid spending that will surely accelerate the time horizon for eventual decline..

http://news.yahoo.com/obama-seek-border-...itics.html

Obama asking for 2 billion in border aid because there are children involved and it'll end up as an expensive revolving door policy.

or this gem...

http://news.yahoo.com/obama-seeks-500-mi...cAjvzQtDMD

Obama wants to hand $500 million to syrian rebels in what will surely be another uncertain foreign policy move with potential future blowback.

This isn't all just on Obama of course because i'm sure if a Republican was in office they'd be doing equally stupid things but this is just an example of how the government is constantly writing checks for a lot of nonsense.
(This post was last modified: 06-29-2014 06:26 AM by El Chinito loco.)
06-29-2014 06:25 AM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-28-2014 10:58 AM)scorpion Wrote:  Traditional economics' obsession with growth at any cost is both destructive and insane. It's like if a father was disappointed that his 20 year old son hadn't grown in three years, so he stretched him out on a medieval torture rack in an effort to squeeze out another inch or two of height.

Modern economists view the economy itself as the end, rather than as the means of delivering goods and services to human beings. They literally have their view of reality completely backwards - human beings are viewed as means serving the economy, and the growth of the economy (which is simply an abstraction derived from a host of manipulated calculations) is the primary end goal.



Growth is a simple necessity because of the fact that interest is not created together with the money. In order to repay the interest in both state expenditure and useless interest on real estate credit (see Swedish JAK bank for interest-free real estate credit), then the economy has to grow. And usually it grows slower then the interest rate, thus states and economies and most economic parties become more and more indebted.

Interest free economics is the first step in clearing away the web of debt - btw - currently most of the debt now can never be repaid.
06-29-2014 08:56 AM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-28-2014 11:44 PM)Samseau Wrote:  
Quote:Speaking for the older guys on this page, I would caution the younger folks not to put too much stake in either "doom and gloom" or the opposite, which has been aptly named irrational exuberance.

I dunno. I think you're just wrong. You lived in a time when the US was rich, and you still think this is the same thing.

Except us young guys got to see the effects of the recession firsthand, while the older guys are riding on the initial good start they had back when the US was much richer. I've seen dozens of my friends and acquaintances get fucked out of careers or jobs in the last 6 years, and I live in a great part of America. I can only imagine how grinding things are in the flyover parts.

You guys think things are going to return to normal, but I think this is the new normal. Thus the shift and focus is on long-term trends to avoid getting caught up in events beyond your control that may suddenly come and turn your life upside down. Hence the emphasis on being location-independent, or even USA independent. Self-sufficiency is the American way so it makes sense to step out of the path of the runaway train.

The US is a lot richer now, on real gdp per capita basis, than it was when I was young. Which is of course the way to measure it. You can see it for yourself here: The peak was 2007, but the trend has been inexorably up. Anyone who remembers being a kid with one black and white TV with 3 channels, one rotary dial telephone, and wiffle balls and bats as your main entertainment looks at todays households full of flatscreens in every room, PCs, laptops, iphones, Gameboys, Playstations, Xbox's, iPads, 500 channels of cable tv, DVRs, DVD players, Netflix, Hulu, Chromecast sticks etc and just marvels at how much MORE kids have.

But here, look at the stats for your self:

http://www.tradingeconomics.com/united-s...per-capita

Now, one of your points is valid: The generation that graduated from 2008 to today has gotten a weak start on their careers, and that may translate into lower overall lifetime earnings. And that's unfortunate - but its an anecdote. A few years of college grads don't make a country. Should things revert to a mean normal recovery and the economy grow again (would only take a better president working with a reasonable congress), the generation that graduates in 2018 etc may face much better job prospects. I realize that's cold comfort to the generation that got screwed, but 6-8 years of slow growth is a blip on a country's overall timeline. Heck, even Germany recovered from two absolute economic disasters post WW I and WWII, with people starving in the streets and inflation at over 1,000%. The fact that a few millennials got a late start on their careers and stayed all butt-hurt about it is no big deal. If things boom again, you can always go back for an MBA in your early 30s and cash in. I recommend you do.
06-29-2014 10:41 AM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-28-2014 08:58 PM)El Chinito loco Wrote:  
(06-28-2014 12:37 PM)The Father Wrote:  Speaking for the older guys on this page, I would caution the younger folks not to put too much stake in either "doom and gloom" or the opposite, which has been aptly named irrational exuberance.

You don't have to be a doom and gloomer to see an upcoming decline though. There's real evidence that the U.S. is headed towards an economic precipice in the not so distant future.
Here are the major factors to consider:

"Is headed" is a very conclusory statement. If you change it to "could be headed", I would agree with you: The factors you name below COULD lead to a very nasty outcome. However, they pale in comparison to the factors that COULD have spelled doom for the U.S. in the 1970's and 80's and early 1990's, but didn't. In fact, we went on to our richest economy ever (2007). Some of those factors were:

- The Cold War: This may seem quant to most people on this page, but schoolkids in the 1970s and 80s went to school every day wondering if this would be the day the soviets would nuke us. Start at 2:02 of this clip, that all school kids were shown.

https://www.youtube.com/watch?v=cyOXMIZ7MpY

Can you imagine if they showed this in schools today?? Legions of butt-hurt dysfunctional children of single moms would shit themselves on the spot!!

- An over-reliance on oil at a time when a cartel (OPEC) explicitly stated it would seek to deny us that oil.

- An economic boom in Japan that resulted in much of the prime real estate in New York, Los Angeles, and Hawaii being acquired by the Japanese and the general consensus, as expressed on the floor of the House of Representatives by Majority Leader Dick Gephardt that in the 1990's the U.S. would "not be a factor" in the global economy (this seems to be wishful thinking on the part of some Democrats in every generation).

- Lots of other fun stuff but you get the point.

Now, could the points you raise below - demographics etc - have a real negative and LASTING hit to the U.S. economy? Sure. But having seen bigger threats fall flat, I don't think they will.

Now, there is one thing that could, finally, permanently curtail the U.S. economy: The fact that new immigrants, women, and young people tend to vote for the most inept creatures ever to run for office!

(06-28-2014 08:58 PM)El Chinito loco Wrote:  I'll say this..derivatives are only one method to engage in basically theft.

You would do well to learn more about derivatives. How, exactly, are they "theft"?
06-29-2014 10:56 AM
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Jaydublin Offline
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
TF, GDP is not really a good measuring stick. Government spending is taken into account and has been off of the charts. I'm not sure with GDP but I know with most governemnt statistics they tweek the formula every few years to provide us with a more positive picture. Given that, Im not sure we can compare their statistics today to those of 20 years ago with any sort of accuracy.

When you were young did only half of the population pay income taxes? What % was on food stamps?
06-29-2014 10:59 AM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
Dont forget the US government changed the calculation of GDP to include " intangibles" last year.

Your GDP to Debt would be way worse if you didn't add that. You should just come out and add hookers and blow like Italy is now including in their GDP.

Also don't forget that the US lies about inflation. Once you subtract GDP growth from inflation you would find that you have been in a recession since 2007.

With a major election this year I dont see how the FED won't pump up the " growth " just to get by the next election for the democrats?

Anyways none of this surprises me. I have mentioned in other threads at the beginning of the year that the US was heading for an official recession this year. What will be interesting is how they try to handle it. Record low rates and a 4 trillion dollar balance sheet pretty much has the US government handcuffed and the FED. The rise of the IMF and SDR will begin to show its head for everyone this year and so will ECB QE.

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06-29-2014 12:03 PM
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Post: #92
RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
For those unfamiliar with it, here is what Biginjapan is talking about:
http://www.businessweek.com/articles/201...c-creation

With the disclaimer that GDP is not the be-all-end-all statistic, I agree that the idea is questionable at best, retarded at worst. R&D expenses increase the production in the future, leading to higher GDP. It just takes a few years to have effect. By including them as GDP itself, it's as if the econometricians are taking out a loan - they are counting something that's already there, just a bit delayed.

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06-29-2014 12:29 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
The fact that real wages haven't increased in the U.S. since 1970 is an incredibly staggering and disgraceful fact. The reality is that workers should be making something like 2.5x their current wages in order to have the same purchasing power that working people did in 1970. So your standard $40k per year job should actually be paying around $100k, and guys pulling in six-figures should be making correspondingly more.

I blame the erosion of wages on three primary factors:

1) The mass entry of women into the workforce
2) The complete capture of the productive economy by the financial sector
3) Increased government meddling in the economy through the Federal Reserve

Since workers cannot make enough to achieve the purchasing power that full-time wages should provide, you see widespread adoption of the two-worker family (which began as a choice and ended up a necessity) and taking on massive amounts of debt through mortgages, student loans, auto loans and credit cards. Then you have the Fed getting involved and intentionally creating inflation for the benefit of the banking system at the expense of the worker/saver.

The end result is that we have technology our great-grandparents could only dream of, yet we work longer hours for relatively less money. The realization that our modern society is little more than an ultra-sophisticated form of serfdom enabled primarily by the banking system was probably the most depressing but explanatory I've ever had. The system is not broken, it's working exactly as intended: it's just not working for us (the common man).

"For I reckon that the sufferings of this present time are not worthy to be compared with the glory which shall be revealed in us.” - Romans 8:18
06-29-2014 12:40 PM
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The Father Offline
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-29-2014 10:59 AM)Jaydublin Wrote:  TF, GDP is not really a good measuring stick. Government spending is taken into account and has been off of the charts. I'm not sure with GDP but I know with most governemnt statistics they tweek the formula every few years to provide us with a more positive picture. Given that, Im not sure we can compare their statistics today to those of 20 years ago with any sort of accuracy.

When you were young did only half of the population pay income taxes? What % was on food stamps?

What you're talking about is the distribution of wealth, not the amount of wealth in society itself. And I agree, it is dispersed in a more lumpy fashion than before. Some of this is for benign reasons. Technology has created more overnight millionaires; there were no What's App? startups selling for $19B years ago. But of course, the only ones who can avail themselves of that directly are the educated, and the ones who avail themselves of these gains indirectly are those invested in the stock market. And some of the reasons are less benign: Some cultures (Jewish culture, Asians, WASPs) have emphasized education and some, sadly, still emphasize thug culture or having babies at 18 (you know who you are).

So, it seems that one thing society should seek to achieve is to create opportunities for those currently in the lower classes. Sadly, the party who traditionally has been regarded as wanting opportunity for the underclass, the Dems, seems to go about this in an ineffective way: Rather than challenge these cultures to do better, they constantly bombard them with the message that they are hopeless victims who CAN'T do any better. The soft bigotry of low expectations. Rather than promote charter schools and competition, they seek to protect a powerful - and woefully ineffective - teachers union. And the leaders of the underclass - the Reverend Al's and the Jesse Jerksons of the world - seem to only enrich themselves without ever uplifting the people they claim to care about. The Republicans are only better in that their policies haven't been as obviously harmful - but they haven't exactly been helpful, either. And most of the blame rests on the cultures of the underclass themselves: No gov't program taught Asians and Jews to revere education as a means of improving themselves, no tax policy made German and Italian immigrants work their asses off in the 1930s or made Mexican immigrants work three jobs today. Others need to follow suit.
(This post was last modified: 06-29-2014 03:16 PM by The Father.)
06-29-2014 03:15 PM
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The Father Offline
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-29-2014 12:40 PM)scorpion Wrote:  The fact that real wages haven't increased in the U.S. since 1970 is an incredibly staggering and disgraceful fact. The reality is that workers should be making something like 2.5x their current wages in order to have the same purchasing power that working people did in 1970. So your standard $40k per year job should actually be paying around $100k, and guys pulling in six-figures should be making correspondingly more.

I blame the erosion of wages on three primary factors:

1) The mass entry of women into the workforce
2) The complete capture of the productive economy by the financial sector
3) Increased government meddling in the economy through the Federal Reserve

Since workers cannot make enough to achieve the purchasing power that full-time wages should provide, you see widespread adoption of the two-worker family (which began as a choice and ended up a necessity) and taking on massive amounts of debt through mortgages, student loans, auto loans and credit cards. Then you have the Fed getting involved and intentionally creating inflation for the benefit of the banking system at the expense of the worker/saver.

The end result is that we have technology our great-grandparents could only dream of, yet we work longer hours for relatively less money. The realization that our modern society is little more than an ultra-sophisticated form of serfdom enabled primarily by the banking system was probably the most depressing but explanatory I've ever had. The system is not broken, it's working exactly as intended: it's just not working for us (the common man).

I challenge anyone who talks about the "capture" of the productive economy by the evil (read: richer than you) bankers to tell me how this has adversely impacted society. Supply and demand tells the story. Your point about women increasing the labor supply is more on point in that regard - as is the fact that global competition has created a more competitive marketplace. But finance itself? How does that impact value? There is more money in sports than ever before - and yet, these athletes who are rarely among the highest IQs among us, seem to be getting paid more than ever. Why haven't the evil, pointy-eared, fang-toothed bankers trampled on these low-IQ workers and made them work at minimum wage? Finance creates opportunity for capital to flow to where it can generate the best return - this is hardly harmful to workers. Rather, I think the knee-jerk blame ascribed to bankers is akin to the way people have traditionally blamed the jews for everything: Naked envy of those who have made more money than others.

Now, one can correctly conclude that by capital flowing to sectors where it can generate the most return, it has necessarily flowed AWAY from sectors where it was previously allocated. But this always has occurred, and it ALWAYS has been a net positive for the economy: So yes, horse-drawn carriage manufacturers went belly-up in the 1920's but MANY TIMES more jobs were created in the auto industry, and yes typewriter manufacturers went belly-up in the computer boom but many times more jobs were created in the PC and software industries.

Finance is nothing but a conduit of capital from where it is to where it is wanted, in the same way a hose is a conduit of water from where it is (an underground well) to where it is needed (your garden). You can whine all you like about how nice it was when the water was in the well, but that's not where people wanted it, or they would have simply left it there.
(This post was last modified: 06-29-2014 03:37 PM by The Father.)
06-29-2014 03:24 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-29-2014 12:03 PM)BIGINJAPAN Wrote:  You should just come out and add hookers and blow like Italy is now including in their GDP.

That's interesting, isn't it. I mean, we add in services like haircuts and legal fees to GDP, so why not sex?? Sex is THE most desired product of *all time*, after food and shelter.

In that regard, society should legalize prostitution and let companies compete for the hottest, youngest, cleanest sex providers with the most advanced blowjob skills. I'll bet Google or some private equity firm could launch a string of brothels with 9+ quality girls from all over the world, at $50 an hour. If only the religious nuts didn't have such sway in our society!
(This post was last modified: 06-29-2014 03:31 PM by The Father.)
06-29-2014 03:30 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-29-2014 12:29 PM)Handsome Creepy Eel Wrote:  For those unfamiliar with it, here is what Biginjapan is talking about:
http://www.businessweek.com/articles/201...c-creation

With the disclaimer that GDP is not the be-all-end-all statistic, I agree that the idea is questionable at best, retarded at worst. R&D expenses increase the production in the future, leading to higher GDP. It just takes a few years to have effect. By including them as GDP itself, it's as if the econometricians are taking out a loan - they are counting something that's already there, just a bit delayed.

It's a good article, though I like this one better: http://online.wsj.com/news/article_email...MzEyNDMyWj
06-29-2014 03:35 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-25-2014 07:42 PM)Samseau Wrote:  The ongoing depression right now is disproportionate in it's effects. Right now flyover country in America is being absolutely decimated and crushed while nearly all growth is contained to the following major cities:

- NYC
- DC
- LA
- Boston
- Chicago
- Miami
- Atlanta
- Seattle
- San Francisco

If you're outside of those cities, you're basically fucked. Meanwhile, my income so far this year looks to outstrip every other year I've been alive, while the majority of America crashes and burns.

People forget that just because it's a depression doesn't mean everyone loses. Quite the country. Usually depressions are just massive relocations of existing wealth. In present America, wealth is being funneled into major cities as middle class white America is cannibalized to support massive government programs, bailouts, and money printing.

Most of the men in this forum are located in major cities - congrats. You get to enjoy the easy pussy and easy money. But do not lose sight of the big picture. America is rapidly transforming right now into a fucking nightmare. Twenty years from now it may not even be safe to leave most city limits. Most roads in America will be completely undrivable.

Do your best to help out the men who lose their jobs to globalization, and do your best not to get fucked over in this shrinking economy.

" But do not lose sight of the big picture. America is rapidly transforming right now into a fucking nightmare. "

Not a nightmare, just another 3rd world country. Do you know how much money a family needs to make to maintain a basic middle class lifestyle nowadays? There are a whole lot of Working Class guys out there living month to month desperately clinging to the fiction they're still part of the middle class.
06-29-2014 03:37 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-28-2014 10:58 AM)scorpion Wrote:  Traditional economics' obsession with growth at any cost is both destructive and insane. It's like if a father was disappointed that his 20 year old son hadn't grown in three years, so he stretched him out on a medieval torture rack in an effort to squeeze out another inch or two of height.

Modern economists view the economy itself as the end, rather than as the means of delivering goods and services to human beings. They literally have their view of reality completely backwards - human beings are viewed as means serving the economy, and the growth of the economy (which is simply an abstraction derived from a host of manipulated calculations) is the primary end goal.

See "The Painless Stagnation of Japan". All the economists talk about how terrible it is (because speculators can't profit off it), but the average Japanese family lives a pretty safe and healthy life with all the modern conveniences.
06-29-2014 03:42 PM
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RE: 2014's GDP Final Revisions: -2.9%, Looks Like Another Recession
(06-27-2014 03:19 AM)Handsome Creepy Eel Wrote:  I view the failure to lift the economy during the last 5 years and the current rebound back into recession as a failure of monetary policy - a proof that it is pointless on its own. Recessions are supposed to be "fought" by fiscal stimulus, something that has been sorely lacking because of political paralysis (whether by republicans, democrats or institutions like the feminist NOW). Just think of it: has any significant piece of infrastructure been built, repaired or upgraded during the last several years?

- highways, bridges or tunnels? nope
- power plants (whether renewable or not)? nope
- airports? nope
- water treatment or desalinization plants? nope
- railways or public transport? nope
- space exploration? nope
- hospitals or schools? nope


Instead, the USA has printed an enormous amount of money. Without reasonable fiscal stimulus measures to funnel it into something useful, it went into this instead:

- war and foreign interventions in god-forsaken countries
- "defense" spending, military technology
- banks (bailouts)
- banks (stock, bond, securities & derivatives markets)
- feminist feel-good (think "Common Core") or witch-hunt ("Campus rape prevention") programs
- lots of other parasitic, pointless programs that contribute nothing to society or the economy


I hardly think that the fact that recklessly printing money and shoveling it to the big banks, military and other assorted parasites at warp speed constitutes an indictment of recession-solving measures in general. It's just a signal that the current measures are retarded and are making the situation worse, not better, something that was obvious from the start.

That said, given the utter paralysis and inability/unwillingness of the USA government to enact a normal fiscal stimulus instead of this QE nightmare, I do agree with the posters here that it would be better to just shut down all such stimulus programs, be they monetary or fiscal. Doing nothing at all and just "letting the market sort it out" would probably bring better results than just this corrupt flailing around, which is all that western governments in general are capable of (a similar thing is happening all over Europe too).

I don't know if anyone remembers, but the neo-feminists nixed most the "shovel ready" projects at the beginning of the "Big Stimulus" package because they weren't giving enough jobs to women.
06-29-2014 04:08 PM
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